New Jersey Is Paid $600,000-Plus from Separate Settlements Resolving Allegations of Wrongdoing by Two Pharmaceutical Manufacturers

TRENTON – Attorney General Jeffrey S. Chiesa announced today that the State has been paid a total of $610,381 as a result of its participation in separate national settlements with two major pharmaceutical manufacturers – Par Pharmaceutical Companies, Inc., and Amgen, Inc. The separate settlements resolve allegations that the two companies illegally promoted their drugs and committed other violations of state and federal law.

According to Chiesa, the California-based Amgen has paid New Jersey a total of $327,038 as part of a national settlement resolving allegations that the company violated state and federal anti-kickback and false claims laws with respect to its nephrology drug Aranesp.

New Jersey, along with the federal government and several other states, alleged that Amgen agreed to provide certain institutional pharmacies additional rebates on Aranesp in exchange for the promise that these pharmacies would promote the drug in “therapeutic interchange” programs conducted in nursing homes they served. The alleged purpose of the scheme was to induce medical professionals working at these facilities to dispense Aranesp in place of competing drugs.

In an unrelated case, New-Jersey-based Par Pharmaceutical paid the State $283,342 to resolve allegations that it marketed its drug Megace ES for uses not deemed safe and effective by the federal Food and Drug Administration, and not covered by state Medicaid programs. On March 5, Par Pharmaceutical pleaded guilty in U.S. District Court in New Jersey to an information charging the company with a criminal misdemeanor for misbranding Megace ES in violation of the federal Food, Drug and Cosmetic Act, and was ordered to pay a total of $18 million dollars in fines and $4.5 million dollars in criminal forfeiture.

The Food, Drug and Cosmetic Act requires drug companies to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for any new intended uses.

Megace ES is a megestrol acetate drug product approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. Par Pharmaceutical’s civil settlement with New Jersey, other states and the federal government resolves allegations that Par Pharmaceutical caused false claims to be submitted to Medicaid, Medicare or other federal programs by promoting Megace ES for alternative uses not approved by the FDA and not covered by those government health insurance programs.

In addition to the false claims allegations, the states and the federal government alleged that Par Pharmaceutical deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market Megace ES to this population.

During this marketing campaign, Par Pharmaceutical allegedly was aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in patients with impaired renal function, and death.

The states and the federal government further alleged that Par Pharmaceutical made unsubstantiated and misleading representations about the superiority of Megace ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from the generic drug to Megace ES. These representations were made despite the fact Par Pharmaceutical had conducted no well-controlled studies to support a claim of greater efficacy for Megace ES. Except as admitted in Par Pharmaceutical’s plea agreement, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability as to those claims.

As a condition of settlement Par Pharmaceutical, which is based in Woodcliff Lake, Bergen County, has entered into a Corporate Integrity Agreement with the federal Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

The Par Pharmaceutical settlement announced today is based on three qui tam cases that were filed in federal court in New Jersey by private individuals, who filed their actions under state and federal false claims statutes.